Exam 3: The Accounting Cycle: Capturing Economic Events

Listed below are accounts of Global Company,each identified by a number.Following this list of accounts is a series of transactions.You are to indicate for each transaction the accounts that should be debited and credited by inserting the proper account numbers in the space provided.

Rules of debit and credit as applied to balance sheet accounts Items in the balance sheet are classified into three categories: assets,liabilities,and owners' equity. (A.)Identify by name two ledger accounts in each of the first two categories above (assets and liabilities)and one owners' equity account.State whether each account would normally have a debit or credit balance. (B.)Describe briefly the rules of debits and credits as applied to the three categories of balance sheet accounts: asset accounts,liability accounts,and owners' equity accounts.

Double-entry accounting is characterized by which of the following?

Bruno's Pizza Restaurant makes full payment of $8,300 on an account payable to Stella's Cheese Co.Stella's would record this transaction with a:

A transaction is first recorded in which of the following accounting records?

Which of the following accounts normally contain a debit balance?

The matching principle refers to the relationship between revenues and expenses.

Effects of a series of transactions on balance sheet items Clark Plumbing had the following transactions during the month of June,the first month of operations for the business: * The corporation issued 12,000 shares of capital stock to Bill Clark in exchange for his investment of $72,000 cash. * Purchased $36,000 of equipment; made an $8,000 down payment and signed a note payable for the balance. * Made payment of $4,000 on the amount owed for equipment. (A.)Compute the balance in the Cash account at the end of June. (B.)What are the total assets of Clark Plumbing at the end of June? (C.)Compute the balance in the Notes Payable account at the end of June. (D.)What is the total amount of owners' equity at the end of June?

The following trial balance of Brian's Pickle Co.for June 30,2014 does not balance. The following errors were discovered: 1.A purchase of supplies for cash was posted as $40 when it should have been $400. 2.The first two numbers of the amount for notes payable were transposed while being copied from the account balance to the trial balance.The correct amount of Notes Payable should be $51,500. 3.A collection of cash was debited to the cash account in the amount of $5,500 but was not credited to the revenue account. 4.A purchase of supplies for $725 on account was not recorded. Instructions: Prepare a corrected trial balance

Sally Smith had expenses of $800 in June which she paid in July.She reported these expenses on her June income statement.By doing this,she is following the accounting principle of:

Eagle News has a $6,000 account receivable from one of its advertisers,Allwood Floors.When Eagle receives $3,600 from Allwood as partial payment:

In the general ledger,a separate "account" is maintained for each:

The principle that states revenue should be recognized at the time goods are sold or services rendered is called:

Which of the following accounts normally has a debit balance?

Land is purchased by making a cash down payment of $40,000 and signing a note payable for the balance of $130,000.The journal entry to record this transaction in the accounting records of the purchaser includes:

Net income is:

The process of originally recording a business transaction in the accounting records is termed:

Which of the following is not a step in the accounting cycle?

Ben Dryden,president of Jet Glass,Inc,noticed a $8,000 debit to Accounts Payable in the company's general ledger.This debit could correspond to:

The credit side of an account is the right side,while the debit side is the left side.